You know, the more we grow up, the more we realized how much we don't know.
I have this feeling in my workplace recently. This heavy 'burden' on how little I know. Is it because my knowledge have grown too little over the past 3 years?
Perhaps, but even more so is just how much my 'observable universe' have expanded.
Let's not even go THAT FAR. Let's just take my field for instance - Information Technology.
Do you know how VAST AND MASSIVE it encompasses?
There's hardware/software architecture, security, operating systems, databases, networks, web-stack, authentication and encryption, programming...
More recently, there's cloud computing, big data, analytics, mobile development, etc...
And I'm just really talking about high level stuff here. Everyone of these can take a lifetime to master.
A degree in computer science is really like primary school in each of these topics. It's just to get you started.
---
Take me for example.
I have been working mostly on databases and business intelligence products for the past 3 years. And still I feel I know very little.
There are new technologies like NOSQL Databases, R Programming, Hadoop (which contains like dozens of different platforms and add-ons), etc...
I have been thrown into a couple of new projects lately, and there:
I heard people talk about LDAP, active directory (authentication-related stuff).
I heard people talk about geospatial data and statistical models.
I heard people talk about Solaris OS, Oracle RAC (OS and DB installations stuff)
I heard people talking about push/pull through servers and their security implications.
I came across new standards like JSON, MongoDB, etc...
Man.
How could one ever learn them all?
And in times like this, is it better to be a "jack of all trades", or "master in one"?
There are SOOOO many things I wanted to learn!
Unfortunately, things aren't so simple now that we are out of school. There's no luxury of time or "structured course" for you to learn each topic step by step now. You're on your own.
---
I really felt that I have become quite stagnant in this area, especially when you browse the net and come across so many new technological terms.
I know I can't master them all, but at least I must be committed to grow.
Hence, I hereby make this resolution that I MUST at least become moderately proficient in these 2 areas within 6 months. (mostly related to my area of work, and the area I want to grow in)
Business Analytics
I know I am no maths expert, but I really want to expand myself in this area. At least know the basics.
For this, I have a schedule SPSS course.
I will pick up R-Programming from Code School and apply them in an upcoming project.
Databases and Data Warehouse
I have scheduled a course in SQL administrator and their integration product.
More importantly, I want to move beyond traditional relational DB.
This is gonna be tough: Pick up on NOSQL DB. For this, I choose MongoDB.
Future
Hopefully, I can find some time to also pick up mobile programming (as a side interest). IOS or Android?
Maybe not to great proficiency like Java, but at least be able to write simple programs on mobile platform.
Sunday, April 26, 2015
Saturday, April 25, 2015
The Investment Pyramid
I have previously blogged about my investment methodology. Today I will pen down my investment allocation.
I pretty much "kope-d" this shamelessly from AK, because I whole-heartedly agree with his strategy.
Think of your all financial assets as a pyramid. How do you ensure your pyramid doesn't topple when a major crisis comes?
A Strong Foundation
You need a strong base. A solid foundation that can withstand any financial tsunami. The broader the base, the safer you are.
You also need the cash when there's blood (fire sale) on the streets. Dump your cash in and scoop up shares at great discounts.
You can adjust this base on personal preference, but currently I am about 70% in cash for 2 reasons:
1. Feel that the market is heading into over-valued terriority.
2. Still new to investing to take too much risks.
Income, The Core
Income stock forms the next layer, and can also be a very safe bet depending on what you buy.
I would say the majority of investments I have made so far are income stocks.
Frasers Centrepoint, Sembcorp Utilities... These are companies that is unlikely to just "die off", and will continue to provide passive income in bad times.
The strategy is to pump cash into income stocks. Income stocks generate cash, which you can use to buy more income stocks!
Basically, it is:
Cash -> Buy Income Stocks -> Dividends -> Buy More Income Stocks -> More Dividends.
Growth
In the upper layer are growth stocks. They are usually higher in price earnings, and doesn't give out much dividends. The upside is they have lots of growth potential that can turn into huge winners, multiplying your intial investments several times.
The downside is that they are usually not "giant blue chips", thus making them "less safe".
I am not really good at spotting growth stocks, so I buy them sparingly.
Speculation
These are basically all sorts of gambling.
Penny stocks, short-term trading, even buying Toto or going to the casino counts as speculative acts.
Stay away unless you have the cash.
AK advocate not allocating more than 1 year of your passive income in speculative stocks. You never want to crash badly here and never recover.
Think of your all financial assets as a pyramid. How do you ensure your pyramid doesn't topple when a major crisis comes?
A Strong Foundation
You need a strong base. A solid foundation that can withstand any financial tsunami. The broader the base, the safer you are.
You also need the cash when there's blood (fire sale) on the streets. Dump your cash in and scoop up shares at great discounts.
You can adjust this base on personal preference, but currently I am about 70% in cash for 2 reasons:
1. Feel that the market is heading into over-valued terriority.
2. Still new to investing to take too much risks.
Income, The Core
Income stock forms the next layer, and can also be a very safe bet depending on what you buy.
I would say the majority of investments I have made so far are income stocks.
Frasers Centrepoint, Sembcorp Utilities... These are companies that is unlikely to just "die off", and will continue to provide passive income in bad times.
The strategy is to pump cash into income stocks. Income stocks generate cash, which you can use to buy more income stocks!
Basically, it is:
Cash -> Buy Income Stocks -> Dividends -> Buy More Income Stocks -> More Dividends.
Growth
In the upper layer are growth stocks. They are usually higher in price earnings, and doesn't give out much dividends. The upside is they have lots of growth potential that can turn into huge winners, multiplying your intial investments several times.
The downside is that they are usually not "giant blue chips", thus making them "less safe".
I am not really good at spotting growth stocks, so I buy them sparingly.
Speculation
These are basically all sorts of gambling.
Penny stocks, short-term trading, even buying Toto or going to the casino counts as speculative acts.
Stay away unless you have the cash.
AK advocate not allocating more than 1 year of your passive income in speculative stocks. You never want to crash badly here and never recover.
Friday, April 17, 2015
Disconnection Between Top And Bottom
This is something I have known all along, and I have further confirmed this recently.
People at the top management will likely never understand what the ground level people goes through.
The top thinks they know everything. They make 'idealistic', 'kaki-song' goals and think they are very 'kiang'. They think they know what the people on the ground wants, so they raise the cash and find the experts to come up with 'technologically advanced systems' that will help 'raise the bar and push them to the next level'.
When the product is finally delivered and tested on the ground users, that's when you will realize a giant mismatch of expectations. Ground people feel the product is redundant, extra-work, replications, even nonsensical. And yet the product have to the go through the acceptance of the ground.
WTF?
It's a BIG PROBLEM.
Why not get the ACTUAL people who will be using the product involved right from the start?
Why get the bosses (people who don't actually use the product, but THINKS they know what their subordinates want) just because they are the 'management'?
And then you find out all along you are building something nobody uses, you scrap it?
Is that a good use of resources?
I always thought there's a limit to human stupidity, then once again they exceed my expectations.
To infinity and beyond.
People at the top management will likely never understand what the ground level people goes through.
The top thinks they know everything. They make 'idealistic', 'kaki-song' goals and think they are very 'kiang'. They think they know what the people on the ground wants, so they raise the cash and find the experts to come up with 'technologically advanced systems' that will help 'raise the bar and push them to the next level'.
When the product is finally delivered and tested on the ground users, that's when you will realize a giant mismatch of expectations. Ground people feel the product is redundant, extra-work, replications, even nonsensical. And yet the product have to the go through the acceptance of the ground.
WTF?
It's a BIG PROBLEM.
Why not get the ACTUAL people who will be using the product involved right from the start?
Why get the bosses (people who don't actually use the product, but THINKS they know what their subordinates want) just because they are the 'management'?
And then you find out all along you are building something nobody uses, you scrap it?
Is that a good use of resources?
I always thought there's a limit to human stupidity, then once again they exceed my expectations.
To infinity and beyond.
Monday, April 13, 2015
Absolute Conviction
I think it's always very easy for outsiders to say "buy low, sell high", etc...
You don't get to experience how tough it is until you put your money on the line.
Do you really dare to buy when you see the stock keep skydiving?
This is based on my true story:
1) When Stock X dropped from $2+ to $1.7, I thought it is a good price so I went in.
2) Then it drop to $1.5. I held on.
3) Then it keeps dropping and dropping. $1.4, $1.3, $1.2...!!!
4) By then I have 'lost' nearly 40% of my money.
Imagine you put in $10K and 'lost' $4k in less than 3 months. You don't know the pain until you experienced it.
To continue buying, you have to have the ABSOLUTE CONVICTION in the company you have brought. I didn't back then. I didn't do enough research or understand the company enough. I brought it simply because I thought it wouldn't go down any further.
I did not have the ultimate trust and belief that the company will rebound back. This usually happens when you don't understand the company enough or you brought based on 'hearsay'.
5) The stock eventually drops to nearly $1 and I didn't dare to average down.
6) 3 months onwards, it has rebounded to hit the $1.5 again. Alas, how much I would have made if I have the absolute conviction to buy more.
It's weird.
- I knew the company had an amazing management and track record (20 years of consistent dividends)
- I knew the problems faced are probably temporary (i.e Crisis in Thailand)
And yet I am afraid of putting in more money.
Thankfully though, I have enough conviction to hold on. For those speculators, they would likely have 'panic sell' and really lost the 40%.
Lesson learn: Invest in a company you understand inside out and absolutely believe in. When the stock plummets, understand why. Is the crisis temporary or permanent? Learn what is the management doing to recover from the crisis.
Lastly, whatever you do, no regrets.
You don't get to experience how tough it is until you put your money on the line.
Do you really dare to buy when you see the stock keep skydiving?
This is based on my true story:
1) When Stock X dropped from $2+ to $1.7, I thought it is a good price so I went in.
2) Then it drop to $1.5. I held on.
3) Then it keeps dropping and dropping. $1.4, $1.3, $1.2...!!!
4) By then I have 'lost' nearly 40% of my money.
Imagine you put in $10K and 'lost' $4k in less than 3 months. You don't know the pain until you experienced it.
To continue buying, you have to have the ABSOLUTE CONVICTION in the company you have brought. I didn't back then. I didn't do enough research or understand the company enough. I brought it simply because I thought it wouldn't go down any further.
I did not have the ultimate trust and belief that the company will rebound back. This usually happens when you don't understand the company enough or you brought based on 'hearsay'.
5) The stock eventually drops to nearly $1 and I didn't dare to average down.
6) 3 months onwards, it has rebounded to hit the $1.5 again. Alas, how much I would have made if I have the absolute conviction to buy more.
It's weird.
- I knew the company had an amazing management and track record (20 years of consistent dividends)
- I knew the problems faced are probably temporary (i.e Crisis in Thailand)
And yet I am afraid of putting in more money.
Thankfully though, I have enough conviction to hold on. For those speculators, they would likely have 'panic sell' and really lost the 40%.
Lesson learn: Invest in a company you understand inside out and absolutely believe in. When the stock plummets, understand why. Is the crisis temporary or permanent? Learn what is the management doing to recover from the crisis.
Lastly, whatever you do, no regrets.
Sunday, April 12, 2015
Stock Analysis 10: Accordia Golf Trust
This is a unique business trust which manages golf courses in Japan. It just IPO-ed last year, and is looking to give out it first distribution in end of June 2015. Stock price has since taken a huge beating due to the weakening of yen.
Market Price (2015-4-10) = $0.77
*Based on Aug to Dec results
Earnings
Approx. EPS: $0.0376 (Different Exchange Rate)
Approx. DPS (First Year): $0.0391 (For first distribution, 5 months operation) / 5 * 12 = 0.0938
This is in the best case scenario at this moment. I shall be ultra-conservative, taking into account the foreign exchange risks, taking a DPU of 0.0391 * 2 = 0.0782
In the 2nd year onwards, DPU = 0.9 * 0.0782 = 0.07
Payout Ratio: 100% first year, at least 90% thereafter.
Ratios
Yield: 9.1% for 2nd year onwards
Profitability
ROE: 3188/84274 = 3.7% (For 5 months period) [Avg for SG blue chips is 11.8%]
Asset Turnover: 23509/183104 = 0.12
Gross Margin: 5194/23509 = 22% (>15% is good)
Net Income Margin: 3188/23509 = 13.6% (>7% is good)
Balance Sheet
Current Ratio: 14503/17208 = 0.84
Debt To Equity: 0.51
Gearing Ratio: Total Liabilities/Total Assets = 98818/183104 = 53.9%*
NAV: $0.8
*It is said that the gearing ratio will come closer to 36.1% after adjusting deferred tax liabilities and member deposit
Additional Info
Biannual distributions based on 31st Mar and 31st Sep. To distribute 100% of income for first year (~$0.0391), and at least 90% from 2nd year onwards.
Personal Opinion:
+ High dividend yield!
+ Leading provider in Japan with a high barrier of entry.
+ Growth Factors: Aging population, return of golf to Olympics 2016, Government boosting tourism.
+ Number of institutions started buying it for the past 2 months (Goldman Sachs, Morgan Stanley, at ~0.76 average price)
- Extremely high leverage of 53.9%.
- High unpredictable weather/natural disaster, and forex risks.
- Concentrated assets (all in Japan), stagnating revenue (lesser young people taking up the Sports)
This is probably the 'riskiest' stock I am aiming, as it's really a more 'recreational' than 'essential' service. The revenue are collected in Yen which we all know has plummet massively (and no one knows whether it'll continue sliding down).
On the positive side, I think the risks have already been priced it (stock has gone drop 30% from its IPO price of $0.97, and opening price of $0.85). At this level, I think the high dividend yield can justify the risks. It has also find a good support - believe the downside should be limited.
Reference:
Share Inv
Market Price (2015-4-10) = $0.77
*Based on Aug to Dec results
Earnings
Approx. EPS: $0.0376 (Different Exchange Rate)
Approx. DPS (First Year): $0.0391 (For first distribution, 5 months operation) / 5 * 12 = 0.0938
This is in the best case scenario at this moment. I shall be ultra-conservative, taking into account the foreign exchange risks, taking a DPU of 0.0391 * 2 = 0.0782
In the 2nd year onwards, DPU = 0.9 * 0.0782 = 0.07
Payout Ratio: 100% first year, at least 90% thereafter.
Ratios
Yield: 9.1% for 2nd year onwards
Profitability
ROE: 3188/84274 = 3.7% (For 5 months period) [Avg for SG blue chips is 11.8%]
Asset Turnover: 23509/183104 = 0.12
Gross Margin: 5194/23509 = 22% (>15% is good)
Net Income Margin: 3188/23509 = 13.6% (>7% is good)
Balance Sheet
Current Ratio: 14503/17208 = 0.84
Debt To Equity: 0.51
Gearing Ratio: Total Liabilities/Total Assets = 98818/183104 = 53.9%*
NAV: $0.8
*It is said that the gearing ratio will come closer to 36.1% after adjusting deferred tax liabilities and member deposit
Additional Info
Biannual distributions based on 31st Mar and 31st Sep. To distribute 100% of income for first year (~$0.0391), and at least 90% from 2nd year onwards.
Personal Opinion:
+ High dividend yield!
+ Leading provider in Japan with a high barrier of entry.
+ Growth Factors: Aging population, return of golf to Olympics 2016, Government boosting tourism.
+ Number of institutions started buying it for the past 2 months (Goldman Sachs, Morgan Stanley, at ~0.76 average price)
- Extremely high leverage of 53.9%.
- High unpredictable weather/natural disaster, and forex risks.
- Concentrated assets (all in Japan), stagnating revenue (lesser young people taking up the Sports)
This is probably the 'riskiest' stock I am aiming, as it's really a more 'recreational' than 'essential' service. The revenue are collected in Yen which we all know has plummet massively (and no one knows whether it'll continue sliding down).
On the positive side, I think the risks have already been priced it (stock has gone drop 30% from its IPO price of $0.97, and opening price of $0.85). At this level, I think the high dividend yield can justify the risks. It has also find a good support - believe the downside should be limited.
Reference:
Share Inv
Sunday, April 05, 2015
The Dividend Machine
I attended my first ever "paid financial workshop" today - The Dividend Machine by the Fifth Person.
I have never believed in attending these paid seminars and events. To me, they are at best mediocre materials that you can easily Google/self learn, or at worst scams meant to brainwash people in giving them their money. I struggled for a very long time before finally deciding to give it a chance.
There are various reasons:
1) I have been reading the Fifth Person blog for sometime, and felt that their articles are really beneficial and insightful.
2) They priced it relatively reasonably compared to courses that costs up to thousands.
3) I am a more income investor than a growth investor, and I am just starting out in my investing journey. I want to affirm what I have learn, and develop a solid methodology in picking stocks.
And finally, the tipping factor:
4) It received a personal recommendation from AK (1 of my most idolized blogger) in addition to positive reviews by other bloggers.
---
Who Is AK?
For those who don't know AK - he's one of the most famous investment bloggers in Singapore, and this guy makes more than my annual salary in passive income.
Yes you read that right. He earns more than me by DOING NOTHING. WTF?
And take note, he wasn't someone born with a silver spoon. He is an ordinary 'peasant' like most of us earning an ordinary income.
He works hard, spends prudently, invests wisely and capitalize on opportunities for many years to enjoy what he has today (he's just into his 40s and already semi-retired). I have benefited immensely from his writings for the past year, and finally decided to attend this course after his stamp of approval.
P.S: Will share more about him and his investing methodology next time.
---
Anyway, review for the course:
It covers 2 key topics - Selecting Income Stocks and REITs.
Content wise, I think you can find 80% of what is taught for free online. They key thing question is can you truly understand, digest and APPLY it to real businesses.
This course organize all these pieces of information and compiled them into an easily understood, step by step evaluation criteria you can use in identifying good income stocks. They also added their "patented criterias", back-testing it to famous companies like Enron and Eratat.
It is a very "down to earth", structured course. No over promises of overnight riches and things like that. (I would have walked out if that's the case) Everything is solid information on picking good stocks that you can hold for the long term. After learning the theory, you get to plow through financial statements of several companies yourself to apply what you have learned.
Overall, I would say it was money well-spent. I think the cost of picking the wrong companies would far outweigh what I have paid for the course.
---
A cow for her milk,
A hen for her eggs,
And a stock, by heck,
For her dividends.
An orchard for fruit,
Bees for their honey,
And stocks, besides,
For their dividends
John Burr Williams
I have never believed in attending these paid seminars and events. To me, they are at best mediocre materials that you can easily Google/self learn, or at worst scams meant to brainwash people in giving them their money. I struggled for a very long time before finally deciding to give it a chance.
There are various reasons:
1) I have been reading the Fifth Person blog for sometime, and felt that their articles are really beneficial and insightful.
2) They priced it relatively reasonably compared to courses that costs up to thousands.
3) I am a more income investor than a growth investor, and I am just starting out in my investing journey. I want to affirm what I have learn, and develop a solid methodology in picking stocks.
And finally, the tipping factor:
4) It received a personal recommendation from AK (1 of my most idolized blogger) in addition to positive reviews by other bloggers.
---
Who Is AK?
For those who don't know AK - he's one of the most famous investment bloggers in Singapore, and this guy makes more than my annual salary in passive income.
Yes you read that right. He earns more than me by DOING NOTHING. WTF?
And take note, he wasn't someone born with a silver spoon. He is an ordinary 'peasant' like most of us earning an ordinary income.
He works hard, spends prudently, invests wisely and capitalize on opportunities for many years to enjoy what he has today (he's just into his 40s and already semi-retired). I have benefited immensely from his writings for the past year, and finally decided to attend this course after his stamp of approval.
P.S: Will share more about him and his investing methodology next time.
---
Anyway, review for the course:
It covers 2 key topics - Selecting Income Stocks and REITs.
Content wise, I think you can find 80% of what is taught for free online. They key thing question is can you truly understand, digest and APPLY it to real businesses.
This course organize all these pieces of information and compiled them into an easily understood, step by step evaluation criteria you can use in identifying good income stocks. They also added their "patented criterias", back-testing it to famous companies like Enron and Eratat.
It is a very "down to earth", structured course. No over promises of overnight riches and things like that. (I would have walked out if that's the case) Everything is solid information on picking good stocks that you can hold for the long term. After learning the theory, you get to plow through financial statements of several companies yourself to apply what you have learned.
Overall, I would say it was money well-spent. I think the cost of picking the wrong companies would far outweigh what I have paid for the course.
---
A cow for her milk,
A hen for her eggs,
And a stock, by heck,
For her dividends.
An orchard for fruit,
Bees for their honey,
And stocks, besides,
For their dividends
John Burr Williams
Subscribe to:
Posts (Atom)